Of Student Loans


My book, “Achieve Financial Freedom: Big Time,” is a very undervalued book. I thought I would discuss one of its topics here:

Student Loans

In an era where school counselors are recommending that kids go to the best, and perhaps most expensive schools, regardless of finances, student loans have, in my opinion, hit alarming levels. Sadly, an increasing amount of people are staggering into retirement carrying a heavy debt burden.


Borrowers age 60 and older had $66.7 BILLION in student loan debt as of 2015. Yes, you read this correctly… and they are struggling to pay it back.

Sadly, if you fall behind in your student loans, the government can garnish your wages or Social Security benefits or even take a portion of your tax refund. The debt really does follow you forever until you die.

Even worse, one of the worst financial “time bombs” is where the parents guarantee a student loan for their kids because more and more kids are either not getting jobs that pay enough to cover the loans or are unemployed altogether. Banks, being the business that they are, then go after the parents for the remainder of the loan which could destroy much of their retirement savings.

Sandy’s tip: My recommendation is to never borrow, in total, more than one year’s annual income. That way, you should be able to pay back the loan in 10 years or less. If retirement is five years away, the the loan balance should be one half of your annual income.

So what do you do if it is too late and you have a lot of student debt?

  1. Direct extra payments to any loan that his the highest interest payments. This is usually student loans,which can be as high as 8% or more, plus you are limited in deducting the interest on these loans, which makes them even more expensive.
  2. If you work in either the public or non profit sector, make at least ten (10) years of payments on federal loans. If you do, you might qualify to have your remaining debt forgiven.
  3. If you have cosigned on a private loan, ask about the requirements for obtaining a co-signer release, which removes your responsibility on the loan. To get this, the primary borrower must have a good track record of making on-time payments and have good credit.
    Sandy’s tip: I would encourage the borrower to have payments automatically deducted from their bank account. Being just a few days late with payments could result in the loss of eligibility for a co-signer release.
  4. If you or the primary borrower is having trouble paying off a private loan, ask the loan servicing company about your options. You might be able to get a longer loan period or even a temporary forbearance in payments, although interest will still accrue!!

If you have complex student loan issues, you might want to check out:

Bottom line: I know this was a lengthy post; however, the information presented is vital and can save the financial future of not only your kids but your own especially if you are considering guaranteeing their loans. Please feel free to share this post and to get my book, “Achieve Financial Freedom: Big Time.

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